Abstract: In order to investigate the scale,cost and the impact on firm performance of the current governmentregulation,we use the first-hand survey data of China’s manufacture firms to analyze.The result shows that 55.26 percent of the firms received various government regulation.Among them，the government’s subsidy regulation accounts for 11.05% of firms’revenue,and more concentrates in state-owned enterprises and large enterprises,while the government fees accounts for 6.98 percent of firms’costs,and more concentrates in private enterprises and SMEs. Empirical test shows that,government regulation has a significant negative impact on firm performance.The reason is that the current government regulation behavior appeared excessive interference phenomenon,which affects the effect of government regulation. Therefore,we propose the following policy recommendations: making good use of market-based instruments rather than direct intervention in the market; gradually withdrawing from the competitive field; establishing evaluationmechanisms to control government behavior and dynamically adjust the government regulation policy as well;improve relevant laws and regulations to cutback the problem of arbitrariness and unaccountability.
Key words: government regulation; firm performance; excessive regulation